Advisory Opinion No. 97-131

Re: Roland C. Moussally

A. QUESTION PRESENTED

The Petitioner, Executive Director of the Pawtucket Housing Authority, a municipal appointed position, requests an advisory opinion as to whether he may participate in the pension plan sponsored by the Laborer's International Union of North America given that he will be participating in future contract negotiations with the Union but that his own salary and pension benefits would not be affected by those negotiations.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, Executive Director of the Pawtucket Housing Authority, a municipal appointed position, will not violate the Code of Ethics if he is a member of the Laborer's International Union pension plan and also participates in the negotiation of the Laborer's Union contract with the Housing Authority, given that his own salary and pension benefits would not be affected by those negotiations.

C. DISCUSSION

1. Facts

The Petitioner is the Executive Director of the Pawtucket Housing Authority who is hired by the Housing Authority Commissioners (5 members). His salary and benefits are set by the Housing Authority. As Executive Director, he participates in all contract negotiations, including the one at issue here. As a matter of course, however, the Commissioners give final approval and ratification of all contracts. The two contracts at issue here cover approximately 45 employees. The Executive Director signs the contracts on behalf of the Housing Authority.

The Petitioner is a member of the State Retirement System by virtue of his position. He also has opted to participate in a pension plan sponsored by the Laborer's International Union of North America. Given that the Union is also a party to the contracts, an agreement was reached between the City of Pawtucket and the Union so that increased contributions to the Pension Plan required of the Authority would be offset against wage increases granted to the employees.

2. Analysis

The Code of Ethics provides that a public official such as the Petitioner shall not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction which is in substantial conflict with the proper discharge of his duties in the public interest. A substantial conflict of interest would occur if the Petitioner had reason to believe or expect that he or any family member or business associate, or any business by which he is employed would derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. R.I. Gen. Laws §§ 36-14-5(a), 7(a).

At issue in this advisory request is whether the Executive Director can participate in the Laborer's Union pension plan since he will be negotiating with the Union on behalf of the Housing Authority regarding the contracts and given that wage increases are linked to pension contributions. In General Advisory No. 6, issued in April 1989, the Commission provided guidance to public officials regarding salary increases. In that opinion, the Commission concluded that a public official would violate the Code of Ethics if the official took any action that affected his or her salary or benefits of employment where the official had reason to believe or expect that he or she would derive a direct monetary gain by reason of the official activity. The Commission recognized that a public official must exercise care "in every situation where the individual's action might eventually lead to financial gain for him or her, a spouse, dependent child, or business associate." See e.g., A.O. 95-52 (concluding that the Code prohibits the participation by members of the Town Council in any discussion or votes regarding the receipt of a stipend by the Council members for the administrative duties carried out on behalf of the Town Council); A.O. 93-74 (opining that the Little Compton Town Council Vice-President may not participate as a public official in any issue involving health care benefits if he has reason to expect that he will derive a benefit by reason of his official activity).

However, in A.O. 96-34, the Commission concluded that the Providence School Board could negotiate certain teacher contracts provided, however, that no benefit package for the School Board members themselves were part of or directly affected by those negotiations, and that any benefit package for the School Board were awarded only after a separate and independent review of such by the Providence City Council. The Commission found that if the City Council conducted such a separate and independent review of the School Board's benefits, members of the School Board would have no reason to believe that their benefits would be affected by the contract with the Providence Teachers Union that they were negotiating.

In this matter, the Petitioner would be negotiating contracts with the Union that manages a pension plan to which he belongs. However, these negotiations do not have the potential to impact the Petitioner's pension contribution since neither his salary nor his pension benefits would be set by the contract. The Housing Authority would continue to review and set his salary and benefits independently. Moreover, any wage increase would require the employee, not the Housing Authority or Union, to increase his contribution to the plan. Since the Petitioner's future pension benefit would be tied to salary and contribution decisions made independent of any matters negotiated with the Union, a substantial conflict of interest or a direct monetary gain by reason of his official activity as defined by the Code of Ethics is not present here.

Code Citations:

36-14-5(a)

36-14-7(a)

Related Advisory Opinions:

GCA 6

96-34

95-52

93-74

Keywords:

Pension benefit

Negotiations